Development of technological capabilities: Problems in developing countries and suggestions for Vietnam

Development of technological capabilities:…

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DEVELOPMENT OF TECHNOLOGICAL CAPABILITIES:
PROBLEMS IN DEVELOPING COUNTRIES
AND SUGGESTIONS FOR VIETNAM
Ass.Prof. Dr. Mai Ha
Ministry of Science and Technology
M.Sc. Nguyen Hoang Hai1
State Agency for Technology Innovation
Abstract:
Development of technological capabilities is crucial part of strategies for nations. It is
backgrounds to get higher labor productivity and quality of products, and to offer
competitive advantages in international markets. Studies and assessments conducted
abroad also show well that tasks to build up and to develop technological capabilities in
developing countries face more tough difficulties than developed countries do because they
remain still limited in resources and institutional aspects particularly. In order to go over
barriers and disadvantages for development of technological capabilities, developing
countries should set up and implement reasonable and wise strategies and policies to
secure enough resources and policy-based tools to offer in-time supports in process of
learning and accumulating knowledge and experiences for development of technological
capabilities in every sectors.
This paper would put first accents to clarify certain aspects related to technological
capabilities such as: What are technological capabilities? How to get them? Which
problems do developing countries should pay attentions to in their efforts for development
of technological capabilities, differently from developed nations? Where are the top key
aspects of attentions of Vietnam in its efforts for development of technological capabilities
in close future?
Keywords: Technological capabilities; Technological innovation; Enterprises; Developing
countries; Vietnam.

Code: 16080501

1. Introduction
Technologies are technical solutions, procedures, know-hows and tools to
turn resources into products2. Technologies are, at the same time,
achievements and top important tools for development. They are also
indicators to measure civilization level and quantitative differences between
1

The author’s contact is at

2

Vietnam Law on Technology Transfer, 2006


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stages of development of societies, and the ways the social welfares and
assets get produced. From this global vision to technologies, efforts to push
up societies to certain levels of development are of the same concepts as
ones to advance them to a higher level of development in capabilities to
absorb, to adapt, to master and to create new technologies.
Acknowledgement of important roles and positions of technologies towards
development lead researchers to go farther in their efforts to look for
mechanisms and ways technologies may cause impacts to development
process of a nation, particularly for developing countries, if they wish to
catch up advancing industrialized nations. In this orientation of studies, the

notion “technological capabilities” was gradually established and gets
admitted in numerous studies in many countries. UNIDO reports (2002 and
2004) also confirmed technological capabilities are crucial actors in process
of economic development, and industrial development of a nation largely
depends on capabilities of its enterprises to develop, to secure technological
capabilities and to maintain competing capabilities. Kim and Nelson (2000)
provided a statement the industrial development is in fact the process to
achieve high technological capabilities and to turn them into innovation of
products and production procedures in accordance to common trends of
non-stopping changes of technologies. Studies by Bell and Pavitt (1993)
indicated the accumulated technological capabilities and conducted
innovations are key factors for developing countries to come to the world
leading positions in various industrial sectors, not only being capable to
catch up international advanced technologies (for example, South Korea in
steel, automobile, semi-conductor industries and etc.) but also creating new
technological trends to lead the world (for example, Japan in electronic
technologies and Brasil in bio technologies, oil production industry and
etc.).
The assessment and acknowledgement of roles and importance of
technological capabilities in process of development provide certain points
of attentions for developing countries including Vietnam. This paper targets
to clarify partially some aspects related to technological capabilities such
as: What are technological capabilities? How to get them? Which problems
do developing countries should pay attentions to in their efforts for
development of technological capabilities, differently from developed
nations? Where are the most key aspects of attentions of Vietnam in its
efforts for development of technological capabilities in close future?
2. Main specificities of technological capabilities
The term “Technological capabilities”, though being admitted globally in
international communities, remains tacit and difficult to be exactly

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Development of technological capabilities:…

quantified. From another side, this term has specific meanings for
individual enterprises as well as various industrial sectors. Then there is no
clearly any unified concept for this term actually.
Despite of lacking such clearly unified concepts for the term, some
common visions were developed in interpretation and description of the
process to build up and to develop technological capabilities. Namely:
First, technological capabilities are processes of learning and accumulating
of knowledge and skills. Technological learning can be understood as
process where enterprises, industrial sectors and nations can accumulate
their own capabilities to conduct innovative activities in different forms and
levels, in connection to production activities. Ernst et al. (1989) had noted
three forms of technological learning, namely: (i) Regular learning which
are conducted in education and training facilities to get professional and
qualification certificates as evidences of learning; (ii) Non-regular learning
which are conducted on-work through practice in working process or
cooperation activities and joint links with partners; and (iii) Indirect
learning which are conducted through gathering of skills and experiences
from activities of recruiting of new labors and implementing joint business
with abroad similar enterprises and partners. Lall (1989, reference form
Aderemi et al. 2009) made a farther classification of three types of learning,
namely: (i) Basic learning which is conducted through practice and
adaptation process; (ii) Post-basic learning which is conducted through
designing and design modifying activities; and (iii) Advanced learning
which is conducted through establishment of complete production systems.

Second, the building up of technological capabilities has to start from the
sector of enterprises. They are central and key forces in all efforts for
development of technological capabilities of a sector or of a nation. This
stand of vision derives from Schumpeter’s concepts when talking about
innovation and economic development. According to Schumpeter and other
studies which follow these concepts, the economic development of nations
is based on evolutional backgrounds of technologies-industries. At the issue
of every development stage of technologies-industries, the world rises to a
new level of civilization and modernity. More important, the driving forces
to advance these shifts get their starting points from evolutional innovations
which gradually lead to great and basic changes of products and production
procedures of enterprises in industrial sectors in all the countries. Up to
now, these evolutional rules have still operated in accordance to their
natural ways.
Third, even having enterprises in centers of activities to build up
technological capabilities, the intervention from the Government are


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compulsorily required to secure efforts of a sector or of a nation to be
completed in “the most perfect manner” in context of permanent and
objectively fluctuating movement of markets. The Government is not
involved directly into efforts of enterprises but it plays important roles, as
sufficient factors, to secure technological capabilities of enterprises to be
implemented and give contributions to global development of the nation. In
another optics, the fact that the Government can secure necessary
conditions for development of technological capabilities is taken also as a

type of energy contributed to development of technological capabilities of
the nation. This point of vision is particularly important for developing
countries which determine objectives to catch up advancing nations but not
set up enough institutional backgrounds and optimal rules for a market
based economy (Litan, 2005). It is also an important background to see
more clearly related concerns and to suggest the necessity to design policies
to promote development of technological capabilities in industrial sectors or
in nationwide scale as indicated in studies by Lall and Teubal (1998), Kim
(1997, 1999), Erga (1987), Dasguota (1987) and others.
Then, in global views, technological capabilities are identified as
capabilities to accumulate necessary resources for creation and
management of technological changes. Technological capabilities get built
up through process of learning and accumulating of technological
experiences, knowledge and skills to enhance labor productivity, quality of
products and competing forces of products, sectors and of the nation in a
more global view.
The involvement and interventions based on policies and investments by the
Government for development of technological capabilities are to facilitate
and to favor the process of learning and to reduce transaction costs without
changing the practical nature of the free market mechanisms.
3. Components of technological capabilities
On basis of the above noted notions to define specificities of technological
capabilities there were developed studies to determine basic components of
technological capabilities which are identified actually as follows:
3.1. Capabilities for production
Capabilities for production are linked to knowledge and skills used in
practice by enterprises including the important role of the ones developed
from on-site activities and “learning by doing” process. Here the most
attentions are paid to three types of activities: (i) Management of

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Development of technological capabilities:…

production; (ii) Techniques for production; and (iii) Reparation and
maintenance of material capital sources.
The management of production is reflected well in organization and control
of production process and its inter-links with input, output and support
activities.
The techniques of production include: control of material use, plan setting
for production activities, control of quality and treatment of troubles.
The capabilities for reparation and maintenance are tested through
assessment of impacts from “duration of troubled machines” and “average
duration between troubles” which reflect impacts of production equipment
to productivity of production activities. Another important activity sitting
on border of capabilities for production and capabilities for small changes is
related to techniques of adaptation. These techniques include small
modifications (adjustments and improvements) arising during production
process. In practice, there are many reasons to make these modifications
including requirements to do better adaptation procedures to meet local
environment conditions.
3.2. Capabilities for investment
Capabilities for investment deal with knowledge and skills used in
determining, preparing, designing and operating new industrial projects,
extension and/or modernization of existing ones. This group includes
capabilities available before or appearing during implementation of
investment activities.
Capabilities of preparation for investments play particular important roles
for the countries in initial stages of industrial development. They include a

series of activities: from pre-FS studies, FS studies, selection of site,
investment planning up to searches of technological sources, negotiations of
contracts and suitable terms and conditions for transfer. The
implementation stage of projects requires support activities including civil
construction techniques and related services, selection and purchase of
equipment, recruitment and training of human resources and start of
operation.
Many elements among these investment items are not realized by producers
themselves but get available from external sources which are mainly
foreign countries. Therefore the search of selected supply sources of
external capabilities plays important roles for building up of capabilities for
investment. Here, local enterprises are not required to conduct fully the
above noted investment activities since certain of them can be purchased


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from external sources. Some other capabilities are linked to searching of
technology supplying sources, evaluating of information provided by
technical consulting experts, evaluating available technologies most
meeting needs of enterprises, negotiating terms and conditions of purchase
transactions and deciding modes of technology transfer (including, for
example, labors of enterprises before start of construction activities, use of
external experts and etc.). Many positive assessments were made for the
cases where enterprises, even still depending on participation of foreign
experts for construction and operation works, get rich profits if they can
absorb provided technological know-hows.
When local enterprises, afterwards, get capabilities to diversify their

products in new sectors they would be capable to “propagate the learning
skills” from gained investment experiences, in case of similarity of
requirements of projects under implementation. These experiences turned to
be useful to build general capabilities for organization of preparation
activities for investment or search of selected supplying sources according
to investment requirements. However, it is not usual the requirements to
build up capabilities for new investment projects can be based on
experiences of the previous ones. This remark remains particularly right
when spent efforts are implemented and focused on stages of basic design,
equipment design and system integration works which require an
accumulation of available basic knowledge and certain creativity.
3.3. Capabilities for small changes
Capabilities for small changes are those which permit continuously to
improve and adapt products and production procedures of enterprises. This
type of capabilities are linked to a large scope of techniques to adapt and to
adjust organizational structures in relation to gradual updating of
capabilities for designing works, quality of products and technological
process. Capabilities for small changes maybe are ones of the most
important factors to implement successfully “catching up” strategies.
Without having strong capabilities for small changes, enterprises have low
chances to get benefits from largely implemented activities for
technological propagation. According to Bell and Pavitt (1993),
“enterprises need to accumulate more knowledge, skills and experiences
necessary to establish road maps for continuous and progressive changes in
a series of activities including an enhancement of initial standards of used
technologies, adjustment of demands for input/output factors and
procedures to meet fluctuations of market inputs and products”.
In addition to sophisticated technology decoding techniques, enterprises can
base their considerations on capabilities of design analysis and system

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Development of technological capabilities:…

techniques for various arrangement of available components or adjustment
of existing designs to meet requirements of new procedures/products or
retain existing procedures/products in more effective ways and with lower
costs.
3.4. Capabilities for strategic marketing
In context of international integration and globalization, the success in
today’s competition activities requires strong capabilities to distinguish
products where the development depends on success of producers in
establishment of close links with clients, in-time fixation or change of their
demands. Therefore, marketing capabilities would be one component in
technological capabilities of enterprises. This type of capabilities can be
interpreted as knowledge and skills necessary for collection of information
on markets, market development and establishment of channels for supply
and distribution of customer services. Also, for successful transfer of
knowledge on customer demands to commercializable products and
services, enterprises should have a strong system of capabilities for product
designing techniques. Therefore, enterprises shifted their concepts or
marketing to a strategic management function. Instead of making business
in fixed markets the strategic marketing activities target mainly
development of new markets and improvement of competitive advantages
of enterprises. The main objectives of these moves are to narrow gaps
between markets, to prioritize sources for innovation of enterprises, and to
reduce demands of time and costs for development of new products. Being
defined in these directions, the marketing capabilities have become an
important component for technological capabilities of enterprises.

3.5. Capabilities for linking
Capabilities for linking are seen through knowledge, skills and
organizational abilities to establish links, both internal and external,
combined with technology transfer at three different levels, namely: (i)
Inside enterprise; (ii) Between enterprises; and (iii) Between enterprises and
organizations of national S&T infrastructure.
Inside enterprises, capabilities for linking deal with abilities for
administration of internal interactions, information sharing between various
internal units and business functions, such as: research and development,
designing, operational techniques, production procedures and facilities,
marketing, sales and customer services.
Inter-enterprise links may be related to domestic and foreign enterprises
including diversified activities such as purchase of materials, parts and


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pieces, exchanges of services and supplier-related information, sharing of
marketing and distribution activities, joint development of product
designing, production technologies and related scientific knowledge.
Development of links with organizations of national S&T infrastructure is
related abilities to attract, to absorb and to upgrade available human
resources of enterprises to analyze and to select options for development of
new technologies, to establish close interactions with research activities in
fundamental and applied sciences. Being provided with important
advantages from strong local S&T infrastructure, such links increasingly
extend over national borders when R&D activities get internationalized.
3.6. Capabilities for large changes

Capabilities for large changes include the establishment of most tough and
complex requirements in technological activities. Capabilities “for large
changes” are understood as knowledge and skills necessary for creation of
new technologies which are in fact large scale changes in designing
activities and core specifications of products. Particularly, these features
include ideas for new products, certain fundamental and applied science
knowledge and capabilities to develop technological ideas up to granted
patents. Capacities for large changes have starting points from many
sources including internal R&D capabilities which are not surely unique
components. Numerous studies indicated that many progresses in
technological development did not come compulsorily from R&D
activities. Nelson (1990) emphasized attentions on roles of production
designing skills and techniques for renovation of production procedures and
products3. By other words, independent R&D activities are important actors
for process of investment and organization of implementation for
promotion of technological development in many industrial sectors.
However, it is not usual cases that R&D activities hold all the dominating
positions in efforts for technological changes. Even in certain sectors, they
hold only small shares4.
For majority of enterprises, R&D activities have a much larger scope of
objectives, not only for development of new production procedures and
products. The most important objective is probably contributions for
development of capabilities for successful technology identification.
3

Some studies on industrial activities show well that efforts for innovation in certain industrial sectors do not fall
under influence of R&D activates (Ernst, 1998: 22)

4

According to studies by Pavitt (1984), there exist differences in technological changes and upgrading between
industrial sectors. There exist various groups of industrial enterprises which are much dependent on adjustments
by suppliers (terminologically called supplier-dominated firms), from adjustment of production scale (called
production-intensive firms) and from adjustment of science-technology factors (called science-based firms).


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Development of technological capabilities:…

Sophisticated R&D industrial labs are seen as “smart” infrastructure
permitting enterprises to follow strictly the actual development of advanced
technologies because they are original sources of new key technologies.
R&D activities are conducted largely also to get advantageous starts for
considerably better products where competitors need to spend much time
and large investments to catch up or to pass over. The targets to produce
products specifically designed for customers would be a catalyst for
continuous and integrated upgrading of technological capabilities of
enterprises.
In addition to development of capabilities for changes inside enterprise, in
principle, part of knowledge which are backgrounds for capabilities for
large changes may come from external sources, universities and R&D labs
of both private and public status.
There exist increasingly closer interactions between scientific research
activities and technological strategies of enterprises. In OECD countries,
academic researches provide so many initial “discoveries”, prototypes and
test samples which afterwards lead to their development and
commercialization by industrial enterprises.
4. Problems in development of technological capabilities in developing
countries

The above presentation shows that the development of technological
capabilities is highly important and plays key roles in efforts for industrial
development of countries. However, in case of developing countries,
studies by Lall (2000), Jomo K.S and Felker (1999) and others, provided
suggestions for concerned problems and potential solutions when efforts
will be implemented for development of technological capabilities
First, the learning of technologies is a practical and meaningful process.
This is important for industrial development where the learning efforts are
mainly intention full and target oriented activities but not passive and selfraised ones. It is not compulsorily required that enterprises use the same
technologies in the same stages at the equal levels of skillfulness: every
enterprise would get certain level of mastering skills on basis of its own
rates of efforts to build up technological capabilities.
Second, enterprises usually do not get full information on technical and
technological options. They need to accept a practical situation that
technological knowledge are changing and they would not get updated of
that. At the same time, there is no common standard, in information aspects,
applied globally for enterprises. But one thing is sure that enterprises in


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developing countries would face risks and high costs for learning efforts
without being well prepared for that. In addition, learning capabilities of
enterprises get impacted by development level for every nation.
Third, enterprises might not know how to build up necessary technological
capabilities. In any developing country, traditional technological knowledge
might not be good backgrounds to master modern technologies.
Technological followers have to see a reality that others (yet

technologically advancing nations) have passed also learning stages. This
situation of technological followers needs to be seen from two aspects:
benefits and raised costs. Benefits are easily seen that they may get
experiences and learn much from them when keep pace in the same process
(note in addition that followers difficultly enter markets dominated by
technologically leading nations). High costs and risks also accompany
technological followers and cause negative impacts to them because of
their limited knowledge, capabilities for development of markets and fast
changing process of technological development.
Fourth, enterprises when coping with uncertain situations of technological
knowledge and market information not only face to maximization of
functions which need to be clearly indicated and skillfully operated (on
basis of the ones by those who advanced) but to development of skills and
habitudes of specific management and organization features. These features
get adjusted through the ways enterprises gather new information, learn
experiences and copy other enterprises. In fact, the learning is the ways of
studying and accumulating.
Fifth, the learning process has highly specific natures for every type of
technologies since technologies have their own particular features and
specific knowledge values which require different ways to access for
learning purpose. Some technologies are closely bound to physical
equipment in tangible forms of values while many others have intangible
and hidden forms of values. Process technologies (such as chemical ones)
have more intangible values than technical technological (such as machines,
cars and etc.) and then they require different ways to access. Note also that
capabilities built up by one in a type of activities are not easy to be
transferred to other persons even in the same scope of activities. Different
technologies are different also in terms of required knowledge and skills.
Some technologies require deep and narrow scope of specific knowledge
and skills while others may require a larger one.

Sixth, different technologies have different rates of dependence on external
information and knowledge which may come from other enterprises,
consulting experts, suppliers and research institutes.


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Development of technological capabilities:…

Seventh, the building up of capabilities can start from all the levels and
scopes of activities including commodity production sectors, product
technologies, production procedure technologies, quality management,
maintenance, purchases, control of stocks of products, external logistics and
relations to other enterprises and institutions. In practical meanings of
things, innovations are realized through R&D activities. The realization of
an innovation means a completed series of technological activities.
However, further R&D activities remain needed to target the use of more
complex technologies. Accordingly, when the absorption of technologies
gets effective the further implementation of R&D activities are found
necessary.
Eighth, technology development can be conducted at different levels. The
lowest level of operating capabilities (knowing how it is) is necessary for
any start of activities for development of technological capabilities.
However, it does not mean that this knowledge can lead to a development
of capabilities in a higher level - knowledge of principles of technology
(knowing why it is) since the wishes to step up to a higher level of
technological capabilities require specific strategies for in-depth
investments. The higher levels of technological capabilities would require
the readiness to accept higher costs, more risks and longer time. In this long
range of activities, it might be feasible for an enterprise to get an effective

level on its lowest level of capabilities (knowing how it is) and then to
remain at this level. But this vision is not optimal if the enterprise wants to
promote a long term vision for development. This enterprise remains
dependent on other enterprises in terms of large improvements for its
needed technologies. The development of capabilities when achieving the
level to catch higher technologies (knowing why it is) would permit
enterprises to manipulate better the choice of technologies, namely they can
chose technologies they need, they can reduce costs for technologies they
buy, they can get more values to add to their own knowledge and they can
develop technological capabilities for their independent creative projects.
Ninth, the learning of technologies links to external factors and interactive
relations. This process is guided through direct interactions with input
material suppliers, commodities, sources of capitals, competitors, clients,
consulting services and technology suppliers. Indirect interactions with
enterprises in non-related industrial sectors, technological institutes,
extended services, universities, professional associations in industrial
sectors and training facilities.
Tenth, technological interactions occur inside a country and abroad.
Import technologies provide the most important source for learning of


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technologies in developing countries. It is necessary to note that
technologies are continuously changing and, more than that, the access to
innovations from other countries is necessary for permanent progress of
technologies. However, the import of technologies has no ways to substitute
the development of indigenous capabilities which is the most effective

result of import of technologies. In final accounts, the effective use of
imported technologies depends on domestic efforts and capabilities. In a
similar way, it is not the case all the models of practice of import of
technologies leading to learning efforts by domestic enterprises. There exist
many factors to impact the ways import technologies get packaged with
added components, namely: If there exist other available sources for the
same technologies? How fast technologies in the concerned sector change?
Which are chances for domestic enterprises to enhance technology
absorbing, mastering and developing capabilities? Which could be policies
to be applied to promote the promotion of technological transfer and
upgrading of technological capabilities?
5. Some suggestions for development of technological capabilities in
Vietnam
The above conducted analysis shows that it is necessary to orient efforts on
basis of development of technological capabilities to establish competitive
positions in industrial production sectors. Studies show that technological
capabilities in a scale of industrial sectors or national scale get established
through a process of learning and accumulating knowledge, experiences
and technological skills through production activities as well as R&D
activities. The process to establish and to build up technological capabilities
starts basically from efforts by enterprises and then propagate farther to the
scale of sectors and the national one.
Efforts by developing countries to build up and to develop technological
capabilities face more difficulties in comparison to developed nations.
Studies made for developed countries show the situation of underdevelopment of market institutional regulations and misbalance in
accessing and receiving information on market of commodities and
technologies. Then the ways to establish and to develop technological
capabilities by developing countries cannot be similar to the one of
advanced countries who developed almost globally market and institutional
structures. In this context, it is found impossible “to trust” fully the

promotion of technological capabilities to free market mechanisms. Instead
of that, it is necessary to secure interventions by the Government through
policies, in efforts for development of technological capabilities. They can


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Development of technological capabilities:…

provide enough driving forces and resources to catch up advanced countries
in certain sectors.
Practice of the process to establish and to develop technological capabilities
in some East Asian countries for industrialization stages during the 1970s
decade shows that these countries were highly pre-active in determination
of priorities in industrial sectors which afterwards became backgrounds for
development of technological capabilities to keep pace with defined
industrial demands. In addition, instead of attentions for efforts to develop
capabilities for fundamental sciences and internal R&D systems for a vision
to compete with industrial developed countries, the Governments of East
Asian countries adopted priority policies of resources for efforts to develop
technological capabilities in industrial enterprises through supports
designed to access sources of new and advanced technologies from external
sources in combination with a suitable rate of measures to protect locally
made products locally developed technologies. On basis of wise policies by
the Government and hard works and high determination to learn by
enterprises, the position and technological capabilities of these countries get
gradually accumulated and upgraded which permit them to enter
competition and to fight for international markets in many industrial
sectors.
For Vietnam, the objectives to accelerate the industrialization process of the

country were recorded in numerous documents by the Party and the State
for long periods. The State also focused resources for realization of
objectives of industrial development as well as to establish technology
based competing capabilities in many industrial sectors. However, it is
possible to note that the orientations of industrialization of Vietnam were
not found consistent and clear in determination of industrial priorities which
would permit to focus resources for purpose to follow up to ends. Due to
these reasons, despite of positive economic growths during recent decades,
the quality of economic growths was not high. Being compared to policies
made by East Asian countries during the past, Vietnam is found to rest
actually in stages to take considerations and to set up plans for that but the
finally obtained results were not observed as positive as it was the case of
those advanced nations.
However, a closer insight in essential aspects of development of
technological capabilities as above presented, as well as useful experiences
by East Asian countries as described in numerous related studies, would let
see many policy related problems to be assessed and added to road maps of
future technological policy making activities in Vietnam. Some suggestions
can be proposed as follows.


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First, in addition to attentions and investments for R&D activities in
universities and research institutes, it is necessary to offer channels to
support and to make investments for technological development activities
by enterprises (including implementation of activities to receive, to study
and to master external technologies). In reality, enterprises may not have

enough resources to carry out R&D activities (which are full of risks and
high costs) but they always have wishes, demands and targets to receive
available, but credible enough, technologies and equipment from external
sources. It is also a large practice that users of imported technologies give
priorities first to get economic benefits and pay less attentions to explore
and to learn potential knowledge values. So, if next following these trends,
in long term visions, producing sectors in Vietnam would be only, in the
best case, “skillful users of technologies and equipment” and then remain
dependent on original technology supplying nations or organizations.
Therefore, the most concerns for changes are to provide additional supports
and incentives by the State for enterprises and scientists to get more
chances to explore and to get more knowledge values bound with
transferred technologies in a longer road map. Following this vision, the
establishment of a research program for technological decoding activities
for certain groups of products or industrial sectors where Vietnam is
advantageously positioned should be included in policy making road maps
in national or local scales. When the program designed in these directions
gets implemented it would open opportunities not only for enterprises but
also for local and foreign scientists to participate in these development
activities.
Second, investments made by social resources and State budgets for
activities to develop technologies need to be well target oriented and
focused. East Asian countries, in their efforts to import and to master
technologies, determined their priorities. Japan and South Korea put
priorities for electronics and car manufacturing industries while Taiwan
concentrated efforts for semi-conductor industry. On basis of these
industrial priority orientations, these countries had determined suitable
realization stages as well as secure financial resources for exhaustive
implementation of designed missions, from imitating and copying received
technologies to mastering and creating new technologies in these sectors.

For promotion of industrialization, Vietnam determined many industrial
priorities in many various sectors. However, from science and technology
point of view, it is highly necessary to determine priorities for specific
industrial sectors which would become the backbone of national economy
and the backgrounds for development of technological capabilities in
efforts to achieve international competition levels. The growing


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Development of technological capabilities:…

development of an industrial sector in international markets would provide
propagation effects for other sectors.
Third, together with efforts for technological development, the factor of
human resources should get developed to be capable to receive and to
absorb new technological knowledge. As experiences from East Asian
countries show the formation of high qualification human resources in
natural science and technical fields can be conducted through domestic
education and training programs. Also industrial production sectors can get
benefits from external partners where they may get maximal efficiency
from imported technologies and then master them and develop new
technologies with lower costs. By these direct ways, technological
capabilities of domestic enterprises get enhanced and then lead to higher
competitive capabilities of domestic enterprises. Here another
recommendation is proposed which is to establish research programs or
study scholarships in certain natural science and technical fields (similarly
to the ones applied actually in West European countries) to attract and to
stimulate scientists and engineers to follow in-depth technological studies
and researches at higher levels. These research scopes need to be bound to

industrial production demands raising from enterprises. At the same time, it
is necessary to change the system of recruitment, use and remunerations for
foreign high qualified researcher who come to work in Vietnam.
Fourth, together with efforts for development of technological capabilities
as backgrounds to enhance local labor productivity and product quality, the
establishment of competition advantages is also important. Policies for
public purchases and mechanisms for establishment of local technical
barriers need to be reconsidered and then designed integratedly with efforts
for development of technological capabilities in prioritized industrial
sectors and production fields in nationwide scale.
Conclusions
Development of technological capabilities is one of the most crucial tasks
of every nation which leads to establishment of competition advantages in
international markets. Efforts to push up the development of technological
capabilities always rest in center focus of attentions from the top level of
national interests down to benefits of enterprises. External research works
and analysis also show that the tasks to build up and to develop
technological capabilities in developing countries are facing with more
difficulties than developed nations do because of their limitations in aspects
of human resources and institutional regulations in particular. In order to
overcome these limitations and barriers, developing countries have to make
reasonable and wise policies to secure enough concentrated efforts and


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policy based tools to provide in-time supports for learning and
accumulating knowledge and experiences for technological development in

every sectors.
As many other developing countries, Vietnam, from early stages,
determined objectives of industrialization and modernization for purpose to
catch up developed nations. Accordingly, Vietnam implemented great
efforts for promotion of science and technology backgrounds in general and
for development of technological capabilities in particular. The
consideration of problems in relation to development of technological
capabilities is found important to provide suggestions for related policies.
This move is expected to give contributions for a faster process of
establishment of technological capabilities in Vietnam./.

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